75 N.J. Eq. 88 | New York Court of Chancery | 1908
Knowles Loom Works v. Vacher, 57 N. J. Law (28 Vr.) 490; affirmed, 59 N. J. Law (30 Vr.) 1586, must be regarded as conclusive in this court to the effect that the statutory language “mortgagees in good faith,” as used in section 4 of our Chattel Mortgage act (P. L. 1902 p. 487) includes a mortgagee whose mortgage has been executed to secure a pre-existing indebtedness.
A subsequent mortgagee in good faith is a mortgagee who receives his mortgage without knowledge of the existence of a prior mortgage. Graham Button Company v. Spielman, 50 N. J. Eq. (5 Dick.) 120, 123; affirmed, 50 N. J. Eq. (5 Dick.) 796; Boice v. Conover, 54 N. J. Eq. (9 Dick.) 531, 538; Bank v. Sprague, 21 N. J. Eq. (6 C. E. Gr.) 530, 536. It follows that complainant’s mortgage will receive the protection of the statute if complainant is a mortgagee who at the time of the execution of his mortgage had no knowledge of the existence of the prior recorded chattel mortgage, which contained a false affidavit touching its consideration. I am unable to reach the conclusion that any constructive notice afforded by the record of such prior mortgage operates, in the absence of actual notice of the prior mortgage or of the record thereof, to destroy the good faith of a subsequent mortgagee. The mortgage which the record protects against creditors and subsequent bona fide mortgagees of the mortgagor is a mortgage recorded with an affidavit annexed thereto, which complies with the requirements of the statute. The fifth and eighth sections of the act clearly refer to mortgages executed in conformity to the provisions of the fourth section.
While the bill in this case does'not in terms aver that complainant was without knowledge of the existence of the prior